What records must a limited company keep?

Two kinds of records

Directors of a limited company have a legal duty to keep proper records. It helps to split these into two groups: statutory records, which are about the company itself, who owns it and who runs it, and accounting records, which are about the money. Both are required by law, and the responsibility sits with the directors personally, not just with the business.

Keeping these records is not merely a box-ticking exercise. They support your accounts and tax, they protect you if a question is ever raised, and failing to keep them can lead to penalties and, in serious cases, action against directors.

Statutory records

These are the company's official registers and records, most of which must be available for inspection and kept up to date. They typically include:

• Register of members (shareholders), who owns the shares and how many.
• Register of directors and their service addresses, and the register of directors' residential addresses.
• Register of people with significant control (PSC), those who ultimately own or control the company.
• Register of charges, security given over company assets.
• Records of resolutions and minutes of general meetings and board decisions.
• The company's incorporation documents, including the memorandum and articles of association.
• Details of share allotments and transfers.

Some of this information is also filed with Companies House and kept on the public register, and the confirmation statement is how you confirm, at least once a year, that the public record is accurate. Keeping your internal registers current makes that filing straightforward.

Accounting records

These are the financial records that let you prepare accurate accounts and a correct Corporation Tax return. The law requires records sufficient to show and explain the company's transactions and to disclose its financial position with reasonable accuracy at any time. In practical terms that means:

• All money received and spent by the company, with what it related to.
• Sales and purchase invoices, and receipts for expenses.
• Bank statements and records of transactions.
• A record of the company's assets and liabilities.
• Stock held at the year end, where relevant, and stocktakings that support it.
• Details of goods bought and sold, and who from and to (except in retail).
• Records behind any amounts entered in the Corporation Tax return, the figures you relied on and how you reached them.
• Payroll records if you employ anyone, and VAT records if you are registered.

Good bookkeeping is simply the day-to-day practice of keeping these accounting records properly. Kept current in cloud software, they double as your management information and make year end far quicker.

How long to keep them

Records must be kept for a minimum period, and for companies the accounting-records retention period is longer than many directors expect, generally several years from the end of the financial year they relate to, and longer in some circumstances, such as where a transaction spans more than one accounting period or where a return is filed late or under enquiry.

The safe habit is to retain everything in an organised, retrievable form for at least the required minimum, and not to discard anything while a year is still open to enquiry. Storing records in cloud accounting software makes long retention easy and keeps records safe from loss or damage.

Companies House and HMRC

Two bodies have an interest in your records, and it helps to keep them straight.

Companies House

Companies House maintains the public register. You file your statutory accounts and confirmation statement there, and keep certain registers that reflect the company's ownership and management. Much of this is visible to anyone, which is one of the trade-offs of operating as a company.

HMRC

HMRC is concerned with tax. Your accounting records support your Corporation Tax return, and if you are registered for VAT or run payroll, there are further records and submissions. If HMRC opens an enquiry, your records are your evidence, so their quality matters a great deal.

Staying on top of it

The record-keeping duties of a company are not onerous once a system is in place, but they are easy to neglect when you are busy running the business, and that is exactly when a missed register update or a lost receipt causes trouble later. The way to stay comfortable is to keep records as you go, use cloud software so nothing relies on memory, and have your registers and filings looked after rather than left until a deadline looms.

We keep both sides in order for the companies we look after, the accounting records through limited company accounts and bookkeeping, and the statutory filings such as the confirmation statement. If you would like to be sure your company is keeping everything it should, request a consultation and we will review where you are.